In previous studies, we constructed a doxycycline-inducible PAX3-FOXO1 expression construct and introduced this construct into immortalized human myoblasts (with and without a constitutive MYCN expression construct). In the resulting cell culture system, PAX3-FOXO1 expression can be up-regulated by doxycycline treatment and then down-regulated by doxycycline withdrawal. In cell culture studies, doxycycline-treated myoblasts transduced with MYCN and PAX3-FOXO1 showed a high level of oncogenic transformation in a focus formation assay whereas there was no transformation detected without doxycycline treatment or in cells transduced only with PAX3-FOXO1 or MYCN. When doxycycline was removed during the course of the focus formation assay of cells transduced with MYCN and inducible PAX3-FOXO1 constructs, smaller foci formed with prominent myogenic differentiation and cell death. To study these oncogenic events in vivo, mice were injected intramuscularly with these cells, and progressively growing tumors formed from PAX3-FOXO1-inducible myoblasts when the mice were fed a doxycycline-supplemented diet; cells expressing both PAX3-FOXO1 and MYCN formed rapidly growing tumors whereas cells expressing PAX3-FOXO1 without exogenous MYCN formed tumors several weeks later. All tumors showed histologic resemblance to human ARMS with high expression of MyoD and myogenin. Frequent mitoses and a high Ki67 staining index were indicative of a high proliferative rate. To determine the requirement for continued PAX3-FOXO1 expression in these tumors, doxycycline was withdrawn after small palpable tumors formed, resulting in a cessation of tumor growth and regression to undetectable levels. Expression studies confirmed that PAX3-FOXO1 mRNA and protein levels drastically decreased, and microscopic examination of regressing tumors revealed a transient decrease in cellular proliferation in association with widespread myogenic differentiation and cell death. Following tumor regression in these animal studies, tumors generally recurred several weeks later despite the continued absence of inducing agent. Analysis of recurrent tumor samples revealed that there was no detectable PAX3-FOXO1 expression in more than half of these recurrent tumors. Cell lines were next generated from primary and recurrent tumors to further investigate these oncogenic effects. Primary tumor-derived lines expressing exogenous PAX3-FOXO1 and MYCN demonstrated PAX3-FOXO1-dependent transformation and tumorigenesis similar to the original transduced parental population. In contrast, primary tumor-derived lines expressing only exogenous PAX3-FOXO1 were transformed in culture and formed tumors at a much faster rate than the original transduced parental population, consistent with the selection of PAX3-FOXO1-dependent transformed variants during tumorigenesis. Studies of cell lines derived from recurrent tumors that did not express the fusion protein revealed transformation and tumorigenesis, both in the absence of doxycycline, consistent with the acquisition of additional oncogenic events that render these cells independent of the fusion protein. The formation of similar recurrences with the primary tumor-derived cell lines or subclones of the original transduced parental cells provided evidence of the generality of this recurrence phenomenon. Finally, though cell lines derived from primary tumors were dependent on PAX3-FOXO1 and differentiated when doxycycline was removed, the recurrent tumor-derived cells did not differentiate under these conditions and instead proliferated continuously, consistent with a PAX3-FOXO1-independent block in differentiation.